Your credit score is one of the most important facets in securing an affordable loan program. Past credit missteps can be costly by making your loan more expensive than it would be under better credit circumstances. This is why credit repair can be such a vital and money-saving process.
Beware of companies that claim to be able to magically repair your credit history. No one can legally remove accurate and timely negative information from a credit report. But the law does allow you to request a reinvestigation of information in your file that you dispute as inaccurate or incomplete, and there is no charge for this. Everything a credit repair clinic can do for you legally, you can do for yourself at little or no cost.
Past credit can be repaired by securing a subprime loan and paying it back consistently. These can be good opportunities for borrowers with past credit mistakes by getting them into the home they want at today's price. If you already own a home, a subprime loan can even give you the chance to clean up your credit and ultimately refinance into a lower rate at a later time.
Factors That Can Contribute to Your Credit Score:
Credit scoring models are intricate and often differ among creditors and varying types of credit. Aside from miniscule differences, credit scoring systems generally take into account the following types of information in your credit report:
- Bills Paid On Time:
Payment history typically is a significant factor. It is likely that your score will be affected negatively if you have paid bills late, especially if you had an account referred to a collection agency.
- Any Outstanding Debt:
The amount of debt you have compared to your credit limit is often measured by credit scoring agencies. If the amount you owe is close to your credit limit it is prone to have an adverse effect on your present score.
- Length of Accumulating Credit:
Normally, credit agencies consider the duration of your credit background. An inadequate credit history may have an effect on your score. Usually younger adults fall into this category; their credit is sometimes referred to as 'Baby Credit.'
Identity Theft Prevention and Your Credit Report:
Your credit report is the most valuable tool existing for distinguishing possible identity theft. Below you'll find few red flags to look for when reviewing your credit report for possible fraudulent activities.
Inquiries into your credit report that seem clearly out of place, based on the date or company placing the inquiry, should be investigated carefully as indication of identity theft.
- Incorrect Address or Employment History:
It is not uncommon to find a small mistake occasionally, but an incorrect address or employment change calls for more scrutiny.
- Accounts You Have No Recollection of Opening:
If any accounts show up on your report and you have no idea where they came from it may be a very good warning that someone other than yourself is using your information you open new accounts.
- Who to Notify of Identity Theft:
People whose identities have been stolen may lose job opportunities, be refused loans, education, housing or cars, or even get arrested for crimes they didn't commit.
If you think your identity has been stolen, here's what to do now:
- Contact the fraud departments of any one of the three major credit bureaus to place a fraud alert on your credit file. The fraud alert requests creditors to contact you before opening any new accounts or making any changes to your existing accounts. As soon as the credit bureau confirms your fraud alert, the other two credit bureaus will be automatically notified to place fraud alerts. Once the alert is placed, you may order a free copy of your credit report from all three major credit bureaus.
- Close the accounts that you know or believe have been tampered with or opened fraudulently. Use the ID Theft Affidavit when disputing new unauthorized accounts.
- File a police report. Get a copy of the report to submit to your creditors and others that may require proof of the crime.
- File your complaint with the FTC. The FTC maintains a database of identity theft cases used by law enforcement agencies for investigations. Filing a complaint also helps us learn more about identity theft and the problems victims are having so that we can better assist you.
*Source: U.S. Federal Trade Commission